Altria’s profits rise on smokeless tobacco, cost cutting
- July 23, 2009
Richmond-based Altria reported a nearly 9 percent increase in profit for the second quarter, as it cut costs and added new smokeless tobacco products.
The company’s net income rose to $1 billion for the quarter, compared with $930 million last year. During the same period, revenue increased 33 percent to $6.72 billion, up from $5.05 billion for the same period in 2008. The increase came primarily from the 62-cent-per-pack federal excise tax that was added April 1.
Excluding the excise tax, sales dipped 2.1 percent across Philip Morris USA cigarette brands.
“Our cigarette business performed exceptionally well, delivering excellent financial results in a challenging environment that included a significant increase in the federal excise tax,” Michael E. Szymanczyk, chairman and CEO of Altria, said in a statement. “Cost savings programs remained on track and the UST integration continued to proceed smoothly. We also remain encouraged by the initial results to enhance the value equation of U.S. Smokeless Tobacco Company’s premium moist smokeless tobacco portfolio.”
Earlier this year, the company acquired UST Inc., a smokeless tobacco company that makes popular brands such as Copenhage and Skoal.
Altria said it has reduced expenses by $165 million. The company plans to make an additional $695 million in expense reductions by 2011.